Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For
the quarterly period ended February 29, 2012

[
]

Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For
the transition period from __________ to__________

Commission
File Number: 333-177518

Step
Out, Inc.

(Exact
name of registrant as specified in its charter)

Nevada

45-2758994

(State
or other jurisdiction of incorporation or organization)

(IRS
Employer Identification No.)

1976
Glacier Meadow Dr., Reno, NV 89521

(Address
of principal executive offices)

(775)
200-5814

(Registrant’s
telephone number)

_______________________________________________________________

(Former
name, former address and former fiscal year, if changed since last report)

Indicated
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.

[
] Large accelerated filer

[
] Non-accelerated filer

[
] Accelerated filer

[X]
Smaller reporting company

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No

State
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 12,000,000
common shares as of April 12, 2012.

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ]
No [X]

These
unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating results for the interim period ended February 29, 2012
are not necessarily indicative of the results that can be expected for the full year.

Step
Out, Inc. (“Step Out” or the “Company”) was incorporated in Nevada on May 2, 2011. Step Out is a Development
stage company and has not yet realized any revenues from its planned operations. Step Out is currently in the business of opening
spas featuring salt water isolation flotation tanks.

On
July 18, 2011 Step Out issued 10,000,000 common shares to acquire 100% membership interest in SOI Nevada, LLC, a Nevada limited
liability corporation from the sole shareholder of Step Out, Inc. The membership interest was acquired at book value from the
shareholder. SOI Nevada, LLC became a wholly-owned subsidiary of Step Out, Inc.

The
accompanying unaudited interim financial statements have been prepared by Step Out, Inc. pursuant to the rules and regulations
of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial
statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed
or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for
a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments.

These
interim financial statements should be read in conjunction with the audited financial statements of the Company for the fiscal
period ended August 31, 2011.

Principles
of Consolidation

The
accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, SOI Nevada,
LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Use
of Estimates

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of
the balance sheet. Actual results could differ from those estimates.

Basic
Loss Per Share

Basic
income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted
average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt
or equity. There were no such common stock equivalents outstanding as of February 29, 2012.

The
Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company
continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes
it is not exposed to any significant credit risk on cash and cash equivalents.

Cash
and Cash Equivalents

The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At February 29,
2012 and August 31, 2011, respectively, the Company had $20,647 and $10,032 of unrestricted cash to be used for future business
operations.

Fair
Value of Financial Instruments

The
Company's financial instruments consist of cash, a deposit, accrued professional fees, and an amount due to a related party. The
carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that
approximate prevailing market rates unless otherwise disclosed in these financial statements.

Stock-Based
Compensation

The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation
– Stock Compensation which requires all share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is
charged directly to compensation expense and credited to additional paid-in capital over the period during which services are
rendered. There has been no stock-based compensation issued to employees.

The
Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to
consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as
compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the
estimated fair market value of the option or warrant, whichever can be more clearly determined. There has been no
stock-based compensation issued to non-employees.

Income
Taxes

Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest
and penalties on income taxes as interest expense or penalties expense. As of February 29, 2012, there have been no interest or
penalties incurred on income taxes.

The
Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

Revenue
Recognition

The
Company is in the development stage and has yet to realize revenues from operations. Once the Company has commenced
operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive
evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion
of stated terms and conditions, and collection of any related receivable is probable.

NOTE
2 - GOING CONCERN

Step
Out has limited working capital and has a deficit accumulated during the Development stage of $11,950 as of February 29, 2012.
Step Out's financial statements are prepared using the generally accepted accounting principles applicable to a going concern,
which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Step Out
has no current source of revenue. Without realization of additional capital, it would be unlikely for Step Out to continue as
a going concern. Step Out's management plans on raising cash from public or private debt or equity financing, on an as needed
basis and in the longer term, upon achieving profitable operations through its business activities.

NOTE
3 – INCOME TAXES

The provision
for Federal income tax consists of the following:

February 29,

2012

Federal income tax
benefit attributable to:

Current
operations

$

1,395

Less:
valuation allowance

(1,395

)

Net
provision for Federal income taxes

$

—

The cumulative
tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

At
February 29, 2012, Step Out had an unused net operating loss carryover approximating $11,950 that is available to offset future
taxable income; it expires beginning in 2031.

NOTE 4 –
RELATED PARTY TRANSACTION

During
the period ended August 31, 2011 the director made advances to the company totaling $100. These advances are non-interest bearing
and have no specified terms of repayment.

During
the period ended February 29, 2012 the director made advances to the company totaling $2,000. These advances bear interest at
6% and are due October 4, 2013.

NOTE
6 – COMMON STOCK

The
Company has 10,000,000 preferred shares authorized at par value of $0.001 per share.

The
Company has 90,000,000 common shares authorized as a par value of $0.001 per share.

On
July 18, 2011 Step Out issued 10,000,000 common shares to acquire 100% membership interest in SOI Nevada, LLC, a Nevada limited
liability corporation from the sole shareholder of Step Out, Inc. The transaction was recorded at $15,000, the book value of the
membership interests.

On
February 25, 2012, the Company issued 2,000,000 common shares for cash of $20,000.

NOTE
7 – COMMITMENTS

Step
Out neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no
obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly
are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved
in other business activities in the future.

NOTE
8 – SUBSEQUENT EVENTS

The
Company has analyzed its operations subsequent to February 29, 2012 through the date these financial statements were issued and
has determined that it does not have any other material subsequent events to disclose in these financial statements.

Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking
Statements

Certain
statements, other than purely historical information, including estimates, projections, statements relating to our business plans,
objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking
statements.” These forward-looking statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are
subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our
ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have
a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes
in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted
accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue
reliance should not be placed on such statements.

Management’s
Discussion and Analysis of Financial Condition and Results of Operations

We were
incorporated as Step Out, Inc. on May 2, 2011 in the State of Nevada for the purpose of for the purpose of developing a chain
of flotation tank therapy spas, beginning with the Northern Nevada market. Our business is operated through our wholly-owned operating
subsidiary, SOI Nevada, LLC. We have procured our initial floatation tank equipment and have raised our initial equity funding
for the purpose of testing and developing our service and opening our first location in the Reno, Nevada area. We are a
development stage company and have not generated any revenues to date.

Flotation
Therapy

A floatation
tank is a light-less, soundproof tank inside which subjects float in salt water at skin temperature. They were first used by John
C. Lilly in 1954 in order to test the effects of sensory deprivation. Such tanks are now also used for meditation and relaxation
and in alternative medicine. Flotation tanks were originally called sensory deprivation tanks. Other synonyms for flotation tank
include isolation tank, floating tank, floater tank, flotation tank, REST tank, flotation baths, think tank, John C. Lilly tank
and sensory attenuation tank. Flotation tanks utilize several hundred pounds of Epsom salts, which to raise the specific gravity
and allow easy flotation by making the body buoyant. This eliminates the sensation of gravity and complements the elimination
of light and sound sensory inputs. In addition, the salt prevents the “pruning” (temporary skin wrinkling), usually
seen when staying in pure water too long. Users may also experience the conventional physical benefits of Epsom salt baths, which
can include the easing of sore muscles and smoother skin.

A therapeutic
session in a flotation tank typically lasts an hour. For the first forty minutes, it is reportedly possible to experience itching
in various parts of the body (a phenomenon also reported to be common during the early stages of meditation). The last twenty
minutes often end with a transition from beta or alpha brainwaves to theta, which typically occurs briefly before sleep and again
at waking. In a float tank, the theta state can last for several minutes without the subject losing consciousness. Many use the
extended theta state as a tool for enhanced creativity and problem-solving or for “super learning”. The more often
the tank is used the longer the theta period becomes.

Participants
in flotation tank therapy may experience intensive relaxation, enhanced concentration, and a state of mental rest equivalent to
a much longer period time spent sleeping. Flotation therapy offers the user a way to escape the distractions that are inherent
in the diverse and high traffic environment of modern living. A flotation session allows the user to time to reset mentally, relax,
and “step out” of the stresses of daily life.

Based on
the current practices of other flotation tank operators, we plan to offer users flotation tank sessions of up to 90 minutes each
for a price of $45 per session. We expect beginners to use the tank for between 15 and 45 minutes, while more experienced users
will opt for the longer session. Because the point of the experience is total mental relaxation, we do not intend to firmly restrict
the time allowed or levy charges per minute.

Planned
Operations and Budget for Fiscal Year Beginning September 1, 2011

Our
initial floatation tank has been procured and built to our order, and we took delivery of the tank on November 17, 2011. During
most of the remainder of our fiscal year beginning September 1, 2011, we intend to schedule flotation tank sessions one or two
days per week in temporary space to be provided by our sole officer free of charge. During this initial phase of operations, we
will get vital customer feed-back that we will use to refine and improve the service and user experience to be offered once we
commence full time operations. In addition, we will use our initial phase of operation to prepare and launch our on-line marketing
platform and to build-up a client base through referrals and word of mouth. Once repeat customers are cultivated and the service
has been sufficiently tested, we plan to expand to a full-time schedule. We currently intend to open our initial full time retail
location in the Reno, Nevada area in the late summer of 2012.

The
operating budget for our first full fiscal year consists of planned expenditures for acquiring certain supplies and equipment
needed for the operation of our floatation tank, marketing expenses, accounting and legal expenses, and rental and labor expense
for the opening and initial operation of our first planned spa location. Management’s estimate of our planned
expenditures by category and by fiscal quarter for our first full fiscal year is set forth below:

Expense
Category

Q1

Q2

Q3

Q4

Category
Totals

Materials and
Equipment

$0

$500

$500

$500

$1,500

Marketing

$0

$0

$300

$200

$500

Labor

$0

$0

$500

$3,500

$4,000

Retail location
rental

$0

$0

$0

$6,000

$6,000

Legal and accounting

$2,500

$2,500

$2,500

$2,500

$10,000

Quarterly
Total

$2,500

$3,000

$3,800

$12,700

Grand
Total for fiscal year

$2,500

$5,500

$9,300

$22,000

Our
recent public offering was fully subscribed in the amount of $20,000, and we therefore should have sufficient cash, exclusive
of any sales revenue, to fund our budget until the end of our fiscal year beginning September 1, 2011. Our ability
to fund our planned budget beyond our current fiscal year will be contingent upon us realizing sales revenue sufficient to fund
our ongoing operating expenses, and/or upon obtaining additional financing.

Significant
Equipment

We
do not intend to purchase any additional significant equipment for the next twelve months.

Results
of Operations for the three and six months ended February 29, 2012 and from May 2, 2011 (inception) through February 29, 2012.

We
have not earned any revenues since the inception of our current business operations. We incurred expenses and a net loss in the
amount of $2,530 for the three months ended February 29, 2012. We incurred expenses and a net loss of $4,105 for the six months
ended February 29, 2012. We have incurred total expenses and a net loss of $11,950 from inception on May 2, 2011 through February
29, 2012. Our losses are attributable to operating expenses together with a lack of any revenues. We anticipate our operating
expenses will increase as we continue with our plan of operations. We have acquired our initial flotation tank at a cost
of $10,080. This was a one-time cost and we do not expect to purchase an additional tank during our first full fiscal year. Our
budget for materials and equipment, shown above, includes among other things the cost of the Epsom salts to be used in the operation
of the tank.

As
of February 29, 2012, we had current assets in the amount of $20,647, consisting entirely of cash. Our current liabilities as
of February 29, 2012 were $5,677. Thus, we had working capital of $14,970 as of February 29, 2012. On October 4, 2011, our sole
officer and director, Sterling Hamilton, loaned us the sum of $2,000 under terms of a Promissory Note. The Note bears interest
at a rate of 6% per year and is due October 4, 2013.

Because
our recent public offering was fully subscribed in the amount of $20,000, we should have sufficient cash to carry out our business
plan until the end of our fiscal year beginning September 1, 2011. Our ability to operate beyond our current
fiscal year is contingent upon us obtaining additional financing and/or upon realizing sales revenue sufficient to fund our ongoing
expenses. Until we are able to sustain our ongoing operations through sales revenue, we intend to fund operations through debt
and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash
requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds
at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Going
Concern

As
discussed in the notes to our financial statements, we have no established source of revenue. This has raised substantial
doubt for our auditors about our ability to continue as a going concern. Without realization of additional capital,
it would be unlikely for us to continue as a going concern.

Our
activities to date have been supported by equity financing. Management continues to seek funding from its shareholders
and other qualified investors to pursue its business plan.

Off
Balance Sheet Arrangements

As
of February 29, 2012, there were no off balance sheet arrangements.

Critical
Accounting Policies

In
December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management
Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Currently, we do not believe that any accounting policies fit this definition.

Recently
Issued Accounting Pronouncements

We
do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations,
financial position or cash flow.

Item
3. Quantitative and Qualitative Disclosures About Market Risk

A
smaller reporting company is not required to provide the information required by this Item.

Item
4. Controls and Procedures

We
carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of October 31, 2011. This evaluation was carried out under the supervision and
with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Sterling Hamilton. Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that, as of February 29, 2012, our disclosure controls and procedures
are not effective. There have been no changes in our internal controls over financial reporting during the quarter ended February
29, 2012.

Management
determined that the material weaknesses that resulted in controls being ineffective are primarily due to lack of resources and
number of employees. Material weaknesses exist in the segregation of duties required for effective controls and various reconciliation
and control procedures not regularly performed due to the lack of staff and resources.

Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods
specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated
to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required
disclosure.

Limitations
on the Effectiveness of Internal Controls

Our management
does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily
prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making
can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by
the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The
design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time,
control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may
deteriorate.

PART
II – OTHER INFORMATION

Item
1. Legal Proceedings

We
are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers,
directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse
to us.

Item
1A: Risk Factors

A
smaller reporting company is not required to provide the information required by this Item.

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